With 27 million Americans starting their own businesses, making a good impression on investors is both vital and difficult. Creating a great pitch is not nearly as complicated as it sounds if you understand your core value proposition. Leave the gimmicks at home and remember these 5 foundations of pitching your business to investors.
1. Take it from PR Professionals
First and foremost, understand who you’re pitching. Take tactics from PR professionals when researching your investors and build your presentation around their personalities, history, and preferences.
…we believe that the key to a successful pitch is that- to really cater to the needs of the reporter and to make it personal. You should be a resource, not a burden.
— Suset Laboy Perez, Owner at Lalaboy PR
Replace the word reporter for investor and you have a solid piece of advice for startups. If you’re using the same presentation for every investor (and have been since seed round) take a beat and turn it around. Take into consideration what causes your target VC or investor has focused on in the past, what issues they talk about most, and where they come from. Catering to an investor’s interests shows you’ve researched who cares about your position the most instead of going to any professional with money in the bank.
Watch for: Products or services in their platform that are very similar to your offering, issues that may clash with your own and things they’ve invested in that haven’t gone the distance. Use your pitch to combat or align with these things, as appropriate.
2. Communicate That “Love at First Sight” Feeling
Your business is your passion, your “blood, sweat, and tears.” Vicariously express to your investors the passion you felt in the initial stages of your business.
Your passion will differentiate you in their minds because it’s an admirable character trait that shows promise. It makes a statement that you’re going to make your dreams happen with or without their help, and that will make them want to be a part of your success story.
Your startup story is unique to you, and there’s an underlying reason of why your business needed to happen. Just like you’re being personable to your investors, be personable about your storytelling and express why it’s not only important to you, but why it should matter to others.
Beware of: Only expressing the emotional side of your business. You need a viable business case too. Few investors want to get involved with a founder who doesn’t see his or her own warts.
3. Be Memorable, Not Numerical
Presenting your market value is important to the presentation, but flooding your slides with spreadsheets to look impressive is not. Entrepreneur, evangelist for Apple, and advisor for Google’s Motorola division, Guy Kawasaki, suggests only 10 slides, 15 at max to present your business to investors. The outline should include:
- Value Proposition
- Underlying Magic
- Business Model
- Go-to-Market Plan
- Competitive Analysis
- Management Team
- Financial Projections and Key Metrics
- Current Status, Accomplishments to Date, Timeline, and Use of Funds
I can’t imagine you were intrigued or moved by the end of a presentation that includes unnecessary statistics and verbiage. Use Kawasaki’s model, and personalize it to your business and investors every time.
You can cut: The long drawn out slides explaining you, your founding team, your discovery process and more. Get to the meat of the presentation and cut, or at least move, those slides to the end. A smart investor will already have done their due diligence on you, and a smart founder will have prep packs ready to leave behind if there are questions.
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Bad ties within a team is an easy sign of failure. Investors will smell inadequacy from a mile away if a team shows even the slightest pinch of poor partnership. Inspire investors with sharp team dynamic by including humor and organic dialogue to display the ebb and flow of your daily workspace.
A team is one of the most rewarding communities you can belong to as a professional. As a manager, it’s your job to ensure that all team members feel included, heard, and valued. No one should feel like an island at your company.
— Ted Karczeqski, Content Marketing Manager and Alexa Voice Service at Amazon
Without your team, you wouldn’t be where you are today, presenting in front of investors the dream job you once fathomed that has now come to life. Express your gratitude by giving the spotlight to your team instead of stealing it away and making them look like a miniscule support group.
Avoid: You don’t need everyone on the founding team in the room and while credit where it’s due is important, it can be overwhelming to have more than 2 presenters.
5. The Exit Strategy
The conclusion is quite possibly the most difficult part of the show. What’s the most important final statement? Not a trick, not an illusion, but the answer to the first question every Shark Tank investor always asks, “Will I get paid back with a premium for the risk I’m taking?” Tell investors exactly how they’ll make their money back. If you leave them uncertain and worried, investment in your company is doubtful.
Make sure you: let them know when they can divest or get their money back. While this date doesn’t need to be etched in stone, it shows preparedness and focus to have a goal set.
Investors have what startups want, surprise them with something they didn’t know they needed. Need help kickstarting your conversation with investors? Take advantage of Talent Tech Labs’ startup mentors and business startup coaches in our Talent Acquisition expert community.